Cadbury favourite in the gum battle

HEALTHCARE giant Pfizer has extended the bid deadline for its Adams offshoot, which includes Dentyne chewing gum and Halls cough sweets, a move that suggests Cadbury Schweppes is emerging as front-runner to buy the business.

First-round bids in the £2.6 billion auction had been expected this week, but it is understood that the deadline has now moved well into next month.

That suggests Pfizer is still trying to drum up interest in the sale, which has attracted the attention of Cadbury, Swiss group Nestle, PepsiCo and Colgate-Palmolive.

Cadbury is one of the few bidders thought to be interested in the whole of Adams. Nestle, which had also been considered a leading contender, and another potential buyer, Kraft, are not keen to buy chewing gum where Adams is world number two.

Wrigley, the surprise top bidder in the recent abandoned sale of chocolate giant Hershey, might be interested in the medicated sweets. But as the world's biggest gum maker, it would be barred from buying the whole business.

Pfizer, which inherited Adams when it merged with Warner-Lambert in 2000 and always indicated it would sell the operation, wants to offload it in one go, rather than break up the business. That is likely to favour Cadbury over other bidders.

Analysts believe Cadbury, which wants to establish a confectionery business in the US, could easily afford the price tag, though Adams would be its largest acquisition. Its biggest operation in the US at present is its soft drinks business, which includes the Dr Pepper and 7Up brands.

Though Cadbury and Nestle joined forces to bid for Hershey, the two are not expected to collaborate on Adams.

Neither Cadbury nor Nestle would comment on the auction, though the Swiss company is likely to be pressed on the subject when it reports thirdquarter figures this week.